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I have both manuals, and they both show two wires. I have three. Controller says "connect both rain sensor delay wires to the terminals marked rain sensor". I have three. I need to know which ones to use or do two go together.

Per the manual you are doing a "Normally Close Installation". The short blue wire should be labeled "Normally Open" and is not used for your type of installation. Ignor the blue wire. The red and black wire should connect directly to your controller.